Global trade is expected to have hit a record $32 trillion in 2022 with goods trade up 10% on the year to $25 trillion, and trade in services up 15% to $7 trillion, according to the UN Conference on Trade and Development (UNCTAD).
But trade growth took a hit in the second half of last year, with third-quarter goods trade dropping by 1% compared with three months earlier. The likely causes were “geopolitical frictions, persisting inflation and lower global demand”, all of which are expected to negatively affect global trade in 2023, UNCTAD says.
UNCTAD lists the key factors likely to affect trade in 2023 as:
Negative factors: lower economic growth forecasts; high prices for traded goods; record levels of global debt and increasing interest rates.
Positive factors: improved logistics as ports and shipping companies have adjusted to COVID-era challenges; new trade agreements are coming into force.
Other factors: the reshaping of global supply chains, including the diversification of suppliers, reshoring, near-shoring and friend-shoring; the shift to a greener global economy.
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